Existing home sales fall in August to lowest level since 2020

Current home sales in the US slowed for the seventh straight month in August rising mortgage ratesRising inflation and high home prices continued to drive potential buyers out of the market.

Sales of previously owned homes fell 0.4% in August of last month to an annualized rate of 4.80 million units, according to new data released Wednesday by the National Association of Realtors. According to Refinitiv, it’s better than what economists were expecting. On a year-on-year basis, home sales fell 19.9% ​​in August.

Sales fell at the slowest pace since June 2020, when the economy was still hit by the COVID-19 pandemic. Barring that, this is the worst period for home sales since 2015. The last time home sales declined for seven consecutive months was between August 2013 and January 2014.

“The slowdown in home sales reflects this year’s rising mortgage rates,” Lawrence Yoon, NAR’s chief economist, said in a statement. “Still, homeowners are doing well now with even higher distressed property sales and home prices than they were nearly a year ago.”

Inflation rises faster than expected in August, prices rise sharply

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A sign is put up for sale in front of a property in Monterey Park, California on August 16, 2022. (Photo by Frederick J. Brown / AFP via Getty Images / Getty Images)

There were about 1.28 million homes for sale at the end of August, according to the report, an increase of about 2% from July and unchanged from the previous year. Despite more homes sitting on the market, homes still sold out in just 16 days on average – close to a record pace. Before the pandemic, homes were usually put on the market for about a month before being sold.

At the current pace of sales, it would take about 3.2 months for existing homes to be delisted – slightly less than the 3.3 reading recorded in July. Experts view six to seven months of motion as a healthy level.

The interest rate-sensitive housing market has begun to cool noticeably in recent months. federal Reserve Took steps to strengthen the policy at the fastest pace in three decades. Policymakers have already raised the benchmark federal funds rate four times in a row — including two back-to-back 75-basis-point increases — and are expected to approve another hike of that magnitude at the conclusion of their meeting on Wednesday. hopefully.

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House on Friday, July 1, 2022 in the Harris Ranch community of Boise, Idaho, United States. The slowdown in the housing market is having an impact across the industry and mortgage lenders are predicting a slowdown in business. (Jeremy Erickson / Bloomberg via Getty Images / Getty Images)

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a . average rate for 30 year fixed mortgage Mortgage lender Freddie Mac climbed 6.02% for the week ended Sept. 15, according to recent data. This is significantly higher than just a year ago when rates were 2.86%.

But even with high interest rates pushing home ownership out of reach for millions of Americans, prices are still sharper than they were just a year ago. The median price of a current home sold in August was $389,500, up 7.7% from the same time a year ago. This is the 126th consecutive month of year-on-year domestic price rise, the longest streak on record.

However, prices declined slightly from the June high of $413,800 – part of a general trend of declining prices after peaking in early summer.

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